Local infrastructure development key to Africa's economic growth
13 May 2014
The capital dependence on foreign direct investment for infrastructural development has been problematic for the African economy.
"We need to know where our savings funds are, what our pension funds money is doing. There is quite a lot of African pension money that is in the continent," Brian Molefe chief executive officer of Transnet told CNBC Africa.
African countries need to trace the flow of capital within the continent and trap capital flows from outside the continent in order to develop infrastructure.
"We need to devise strategies to trap local capital for investment in infrastructure and then outside investment will come into the continent. We are being constrained by [foreign] definitions of risk," he said.
In March 2014 The African Development Bank (AfDB) proposed for an alliance with qualified consultants or firms to fundraise capital in efforts to build Africa50.
Africa50 is an infrastructure development initiative which aims at increasing the stock of infrastructure projects such as transport, ICT, power, water and sanitation.
"In future, countries will be divided by their ability to innovate new ideas," said Molefe.
The AfDB is currently busy with developing infrastructure in various parts of Africa.
In Kenya there is development project for power, The Menengai Geothermal Development Project. The project seeks to increase power output capacity to the consumption needs of 500,000 households, 300,000 for small businesses and 1,000 gigawatt hours will be attainable for industries and businesses.
"In power generation we can use modern technology, we have the Congo River that can provide two thirds of the continent with environmentally friendly electricity," he explained.
The Nacala transport corridor between Zambia, Mozambique and Malawi will reduce transport costs by 25 percent in 2015 and increase the cargo capacity by 700 000 tons between 2009 and 2015.
The Tangiers Marrakech Railroad project in Morocco has the potential of logistical developments which will help counties in the North African region.
As the Africa's largest GDP Nigeria has plans to develop three ports for convenient logistics.
"As rail is concerned Nigeria is making investments around Lagos, there are talks of developing ports with a large number of cranes in Abuja which give an indication of the underlying economic activity in Nigeria," said Molefe.
Other 3 billion Networks (O3b) multinational project will benefit, Sierra Leone, the Democratic Republic of Congo, Nigeria, Ghana, Cameroon, Malawi, Kenya and Zambia.
The O3b project will have a collection of eight medium-orbit satellites within these countries. The project will result in the integration of Internet, broadband Internet, telecommunication and cellular access within the west, east and central regions of the continent. The private-sector of telecommunications will experience growth in revenues.
"The digitalization is going to drive innovation and the countries which are going to be prosperous are the countries which are going to take advantage of the digital era," said Molefe.
Original article by Thando Matutu